The original blog from IndiaThink Founder Brandi Moore...for more visit IndiaThink.com

July 07, 2007

Yes---Corruption is Alive and Well in India.

A few months back I interviewed for a job working for an American company inside India. Goals of the job were exciting: working with Indian employees and American values to create a more efficient dynamic to meet the goals of the organization.

Concerns around the job landed squarely on the "package" they had crafted for the position. When traveling down the road of details they explained they had not designed any options for living arrangements. I stopped right there---I had about 25 other questions including but not limited to bi-country health care, repatriation insurance, and tax advice, etc. Since our discussion they have placed the position on hold and according to their HR contact have spent some time considering my suggestions. One of the topics that arose during this afternoon visit was bribes. The question was specifically: "when you think about making this move, what scares you the most"?

My answer: Situations will arise that require out of the box thinking and I would be seeking organization support when these pop. For example, what if I have to give someone a bribe?

Bribes are alive and well in India. The New York Times featured an article today about an Indian wife whose husband has been labeled as a whistle blower in Bangalore. To keep him alive, she has created a blog about his experience and serves as a support group for others in the same situation. The blog is somewhat awkward to an American reader but its plethora of content smells like urgency and fear that you can feel while scrolling through its contents.

The most fascinating factoid from the NYTimes article indicated that Transparency International reported in its 2005 study that Indians pay more than $5 billion a year in bribes.What for you ask? Water, electricity, telephone, speedy service or service at all.....and the list goes on and on.

After reading the article I am of the opinion that this situation will only get worse as larger sections of the population find lucrative employment in emerging private industry. Until very recently jobs in India's Government Service were considered hot commodities, often acquired by bribes themselves. These jobs were considered positions of power and came with highly padded salaries resulting from excessive bribes. Today the salary for these positions pale in comparison to offerings in the private sector. Choice is being introduced and people are growing restless with the old way of "getting things done". As aptly put by the victimized wife: “The people who are supposed to be controlling corruption and fighting
on behalf of the poor, they are sucking blood out of the poor.”

Anyone heading to India should be walking with open eyes to the reality of bribes. They are required to get things done and this may cause a serious conflict of interest if your organization has a strict policy regarding this matter. Be aware of policies around your employment and open up conversations about bribes before you engage. You may be shielded from this activity through the third party who is managing your India operation but its fruitful to be aware it is common practice.

2 Comments

I will acknowledge that you are almost certainly correct that bribes are a serious problem in India (and in most of the developing world). However, if one really cares about India's development, doesn't giving in and making bribes perpetuate the problem?

Also, I think it is critical, given the US government's recent efforts to enforce the Foreign Corrupt Practices Act (FCPA), to understand what types of "facilitation payments" are legal and which are not. Any company, that allows bribing without drawing a bright line between those that are legal and those that are not, is placing itself and its employees in a very risky position. And, even if the company allowed bribes to take place, the individual making the bribes will often end up in jail (depending on their size, frequency, etc.)

In principal a company should not be promoting and facilitating the act of bribery. But, these opinions are based from a cultural view that stems from living in a society that does not have a wide spread bribery network. There are many many countries in the world where bribes are common place---getting pulled over by a traffic cop in Russia there is no expectation that a ticket will ever be written, rather cash payment is expected. Getting through customs in Nigeria when the agent starts eying your glasses (excuse the pun) and you are suddenly in a decision point of do I want to get out of here or do I want my glasses?

Is bribery right? No. Does bribery exist across the world, especially in third world countries? Absolutely. It becomes the choice of the person involved as to whether they want to make something happen or rest on their puritan laurels. Ironically, US firms are constantly in a quandary here because their cultural objective is to be successful in a way that is efficient--faster and cheaper than anyone else. How do they do it in the third world? By allow bribes to take place in foreign countries while they turn their heads or they wash their hands entirely and run their operation through a third party.